Leaders of Myanmar and Thailand last week agreed to invite Japan as a third investor in the floundering Dawei project during a visit to the area.
President U Thein Sein and Thai Prime Minister Ms Yingluck Shinawatra visited the Dawei Special Economic Zone on Monday, December 17 and discussed ways of accelerating the project as well as issues related to telecommunications, electricity, environmental conservation and investment.
President U Thein Sein said the project is important not only for Myanmar and Thailand but also other ASEAN nations.
Moreover, he said that a third country must be invited as Myanmar and Thailand could not implement the project on their own. He singled out Japan because of its experience with similar projects and it had shown interest in the development.
Ms Yingluck agreed and pledged to speed up implementation of the project by improving cooperation between six sub-committees established by both sides.
The Dawei Deep Sea Port and Special Economic Zone is in Nabule village tract, Yebyu township, Tanintharyi Region. The governments of Myanmar and Thailand signed an initial agreement launching the project on May 19, 2008.
A further agreement was signed in late 2010 but Myanmar partner Max Myanmar has pulled out of the project, while Thai developer Ital-Thai Development Company has struggled to attract investors. The project has also met grassroots opposition from communities upset over the minimal compensation paid and potential environmental consequences of the development.
Experts said the visit of the two leaders was an important step for boosting the confidence of prospective investors but they expected it would be hard to persuade Japanese firms to put money into Dawei.
“Thilawa is the priority for the time being because it is close to the big market of Yangon while Dawei is a long-term project. Thilawa is for light industries but Dawei is for heavy industries,” Mr Kiwamu Honda of Dawei Development Company Ltd told the Bangkok Post on Tuesday, December 18.
“Japan has an interest in both Dawei and Thilawa, but it has to choose one for now,” he said.
Mr Honda also noted that the master plan for Dawei has been proposed but is still awaiting endorsement by the Myanmar government.
U Tin Maung Swe, chairman of the Support Group for the Deep Sea Port and Special Economic Zone (SEZ), said the two leaders discussed ways to accelerate the project, including attracting more investment, but he refused to give further details.
“It is a closed door meeting, they discussed secretly,” he said.
He said some Thai businessmen accompanied Ms Yingluck but no Japanese investors took part in the trip.
“Japanese investors came and surveyed the project site several times. They are also interested in Dawei and they told me they are willing to invest in it,” he said.
Addressing the concerns of local residents, he said compensation had been given according to what they had requested. Relocation projects will continue for those living in project areas and work on infrastructure will get underway early in 2013.
The SEZ will directly affect 16 villages, with 3984 households totalling 23,120 people forced to relocate.
Ko Lay Lwin from Nabule village tract said the developers paid what they asked but residents still are not happy at having to move.
“We don’t want to go anywhere and don’t believe in this development. There are three gas pipeline projects that pass through Dawei but we still have to pay K435 a unit for electricity. We are worried whenever we hear the words ‘development project’,” he said.
But Ko Ye Lwin Myint, a member of the Dawei Development Association, said he preferred Japanese investors to those from China.
“I think Japan values its image and the Japanese government is transparent. However, we have to watch closely so that our region is not too damaged by this development,” he said.
According to the initial project plan, Ital-Thai will get a 75-year concession to develop the area and will provide 50 percent of the investment for phase one, estimated at US$8.6 billion. Max Myanmar was to invest 25pc.
The project comprises three phases, to be carried out over a period of approximately 10 years, from 2010 to 2019, although it has been delayed.
U Tin Maung Swe said the first phase should be completed by 2015.